Montgomery County issues $55M in bonds to fund infrastructure projects

NORRISTOWN — The Montgomery County Board of Commissioners issued $55 million in bonds to address some county infrastructure projects during Thursday’s bimonthly meeting.

While it does not address every item on a long laundry list of infrastructure needs throughout the county, the issuance of the bond addresses a good part of those needs, without increasing the county’s current debt service over the next decade, according to the county’s top money manager.

Last month, the board approved the bond ordinance. Monson said the bonds were sold through a competitive sale process via an online bid service. The winning bidder was PNC Capital Markets, with a True Interest Cost (TIC) of 2.39 percent. The reported difference between the lowest bid and the next lowest bid was .017 percent.

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Last year, Moody’s economics analysts downgraded the county’s bond rating from AAA to Aa1 rating. Monson said Moody’s economic analysts took another look at the county’s bond rating and offered a better picture.

According to Moody’s, said Monson, “we still have a sizable, diverse tax base, a very strong socioeconomic profile, a low debt burden and a stable outlook.”

This, he said was particularly attributed to the belief that “the current management stabilizing financial operations, and the recent actions that this board has taken to control expenditures and improve the budgeting procedure.”

Monson said the bonds were restructured to optimize the debt service structure and ensure compliance with Pennsylvania Dept. of Community and Economic Development regulations.

“I want to point out how competitive and transparent this process was, whether it’s in the procurement of bids or the bond issuance,” said commissioners’ Chairman Josh Shapiro. He thanked Monson for a job well done.

“The work that you did to effectively mirror the rating that was squandered (under the prior administration) is something that I think is not only laudable because of your skill, but important for the taxpayers to understand that they didn’t lose out.”

Montgomery County’s debt service in 2013 – before the issuance of these bonds – was $39.16 million. The new bond issue, which runs through 2033, provides for no increase to the debt service, according to Monson.